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frustratedandscared · Oct 26, 2006, 08:09 PM

I live in Ontario Canada. I have 2 outstanding student loans (provincial & Federal)... The loans have been outstanding since 1998... when my ex-husband and I lost our business. We both claimed bankruptcy in late 2000 and I received my discharge in early 2002. Since then due to financial hardship I have made sporadic payments to them... I have been separated since last April so haven't made any payments. I have been getting calls from a collection agency and he asked me last week if we could set up a re-payment agreement or settlement as the original debtor was getting ready to pull back the debt and tend to it themselves. I explained that the best I could do was $50/month. He phoned back and told me today that he has spoked to the original debtor and they would not consider $50/mth so they were going to pull it back... he also told me that they had someone from his office call my home yesterday and speak with my 12 year old son... where in they asked if I was at home and he told them no so they asked if his daddy lived here... and my son very confused told him "sometimes" as his father does come for week long visits as he works out of province & or country. He also stated that they listened to my answering machine and that because there were two names on the answering machine that it was going to go to court and that I had better talk to my lawyer. So I guess my question is/are:
a) Can/Do they return the debt to the original debtor... in this case I think it would have been either the Prov gov't or CIBC
b) Can they refuse payment?
c) Can they question my child?
I don't know what to do... Please advise

RichardBondMan · Oct 26, 2006, 08:16 PM

I am in the US, not familiar with Candian law, but in the US, bankruptcy doesn't wipe out federally insured students loans from what I understand. Can the collection agency refuse payment, again I am in the US, but I woud think if you are trying to pay less than they want, they could demand a minimum amt. About you son talking to them, just ask him to refer all inquiries to you. Why not pose another question and title it "Any Candian residents or atty's please help me.".

mr.yet · Oct 27, 2006, 04:37 AM

Are they collecting for the Prov gov't or CIBC, or did they purchase the debt?

If you are sending payments, you are attempting to satisfy the debt, I don't know about Canada laws, but you have want to do a search on Debt Collectors refusing payment, it may place them in dishonor.

ScottGem · Oct 27, 2006, 06:23 AM

What it sounds like to me is the debtor placed the debt with a collection agency. This usually means the agency gets to keep a portion of whatever they collect. Now the agency has apparently not gotten any money from you so the debtor is taking back the debt to collect on their own. Nothing about that sounds unreasonable or illegal.

It doesn't sound like anyone is refusing "payment", instead they are refusing a settlement agreement. Without knowing the amount of the debt, $50/mth might not even cover the interest on the debt. Both the agency and the original debtor have the right to refuse such a settlement.

The only thing they did that may have overstepped is questioning your son. However I don't understand what the two names or the answering machine has to do with anything. The debt is yours. None of that should matter.

Whether this goes to court depends on whether the debtor thinks you can pay. If it does go to court, there is little you can do since you do owe the money.

Iknowalotofstuff · Sep 21, 2007, 09:45 AM

Originally Posted by frustratedandscared

I live in Ontario Canada. I have 2 outstanding student loans (provincial & Federal)....The loans have been outstanding since 1998....when my ex-husband and I lost our business. We both claimed bankruptcy in late 2000 and I received my discharge in early 2002. Since then due to financial hardship I have made sporadic payments to them....I have been separated since last April so haven't made any payments. I have been getting calls from a collection agency and he asked me last week if we could set up a re-payment agreement or settlement as the original debtor was getting ready to pull back the debt and tend to it themselves. I explained that the best I could do was $50/month. He phoned back and told me today that he has spoked to the original debtor and they would not consider $50/mth so they were going to pull it back....he also told me that they had someone from his office call my home yesterday and speak with my 12 year old son...where in they asked if I was at home and he told them no so they asked if his daddy lived here...and my son very confused told him "sometimes" as his father does come for week long visits as he works out of province & or country. He also stated that they listened to my answering machine and that because there were two names on the answering machine that it was going to go to court and that I had better talk to my lawyer. So I guess my question is/are:
a) Can/Do they return the debt to the original debtor...in this case I think it would have been either the Prov gov't or CIBC
b) Can they refuse payment?
c) Can they question my child?
I don't know what to do.....Please advise

A student loan placed with a collection agency is in default and a demand can be made for payment in full. If the demand is not or cannot be met, the CA can commence a legal action with the permission of the student loan creditor. If you are making an effort to pay based on ability, it is unlikely that the government will agree to the legal action. Only a very small number of student loan debtors are sued.

A collection agency cannot refuse payment. Every debtor has a common law right to pay any amount at any time on any debt subject to the default provisions of said debt. They must accept your payment but such payment does not stop them from enforcing the default provisions if they chose to. The best way to deal with a collection agency is to tell them what you will pay and when you will pay it and deal with the consequences.

Privacy legislation prevents collection agencies from disclosing confidential information. I would be more concerned about a minor giving the information to a stranger than the collection agency asking the question. If they ask for or provide confidential information to someone other than the debtor including a spouse, file a complaint with Government Services who regulate the Collection Agencies Act.